October 30th, 2023
Current market conditions indicate the potential for a rebound due to the market holding the daily Bollinger Band peak. This peak, located in the 4120-16 area as previously discussed, may serve as a significant level. Should the level of 4116 be breached, it may signify a downward trend with potential targets at 4078-72. It is important to note that bearish momentum persists and therefore, it is advisable to refrain from committing to long positions at this juncture.
In today’s plan, the bears must defend the crucial range of 4150-62. Failure to hold above this range on market open I will look for a short position, potentially leading to a retracement towards 4120-16. A breach below 4116 could result in further declines, potentially targeting 4178-72.
Alternatively, if the bulls manage to retake 4162, we may see a quick rally towards the significant pivot level at 4282. However, failure to maintain the pivot level would see a return to the 4162-50 range. Sustaining above this pivot opens up the possibility of reaching 4200-10. It is prudent to approach positioning in these areas with caution and discretion, preferring a conservative and strategic approach that aligns with market reactions.
Furthermore, I looked at the 10-year charts and took a long position in ZN this mornign at 106’02 with a tight stop at 105’25. The current range-bound nature of interest rates suggests a potential pullback to 106’30 in future sessions if we can sustain above 105’25. This observation holds relevance for traders in ES, NQ, and RTY. A successful hold could bolster the bullish case for the indexes. Conversely, if the 10-year yield reverses from this point, it may indicate a slight increase in rates and potentially curtail any rallies in the indexes.
Additionally, it is worth monitoring AAPL this week as they report their earnings. Trading weeks that coincide with earnings and FOMC days can introduce additional volatility and uncertainty. As a precautionary measure, it is advisable to maintain a conservative and disciplined approach during such periods. Keep it light and tight as we used to say in the S&P pit. Cheers, DELI